4 March 2005
Raiders of the Deep Rock
As of yesterday, billionaire Carl Icahn was the largest single stockholder in Oklahoma City's Kerr-McGee Corporation, controlling about 4.68 percent of KMG stock. Icahn associate Barry Rosenstein controls about 3 percent of KMG.
Typically for Icahn, he began making suggestions. In a letter to Kerr-McGee chairman Luke Corbett, Icahn suggested that the chemical business be spun off and that the oil-production business start selling future production in advance while prices are high. "Never before," said Icahn, "has there been such a disconnect between the stock market valuation of publicly traded (exploration and production) companies such as KMG . . . and the value at which oil and gas futures are trading in the commodity markets."
And while he was at it, Icahn nominated himself and Rosenstein to the Kerr-McGee board, a move which was not greeted warmly by management.
The most likely outcome? KMG will follow Icahn's recommendations to the extent that they get the stock price up to where he wants it, and then will pay him handsomely to go away.Posted at 11:45 AM to Soonerland